SCIO briefing on China's economic performance in first half of 2020
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E-mail China.org.cn, July 17, 2020
Shou Xiaoli:
Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Ms. Liu Aihua, spokesperson of the National Bureau of Statistics (NBS), and director general of the Department of Comprehensive Statistics at the NBS. Ms. Liu will introduce China's economic performance in the first half of 2020, and answer your questions.
First, let's give the floor to Ms. Liu Aihua.
Liu Aihua:
The coordinated efforts for epidemic control and economic development delivered notable results with the national economy gradually recovering in the first half of 2020. In the first half of 2020, faced with serious challenges posed by the COVID-19 outbreak and a complex and fast-changing environment both at home and abroad, under the strong leadership of the Central Committee of the Communist Party of China with Comrade Xi Jinping at the core, the whole nation coordinated efforts to advance both the prevention and control of the epidemic and socioeconomic development, and firmly implemented the decisions and arrangements made by the Central Committee and the State Council. Sustained improvements were made in epidemic prevention and control, and the resumption of work, production, business and market was advanced at an accelerated pace. As a result, the national economy shifted from slowing down to rising in the first half of 2020 with economic growth in the second quarter changing from negative to positive and main indicators showing restorative growth. The national economy recovered gradually, the basic livelihood was ensured effectively, market expectation was generally good, and the overall social development was stable.
According to preliminary estimates, China's gross domestic product (GDP) was 45.66 trillion yuan in the first half of 2020, a year-on-year decline of 1.6% at comparable prices. The GDP for the first quarter declined by 6.8% year on year and that for the second quarter grew by 3.2%. The value added of the primary industry was 2.61 trillion yuan, a year-on-year growth of 0.9%; that of the secondary industry was 17,28 trillion yuan, down by 1.9%; and that of the tertiary industry was 25.78 trillion yuan, down by 1.6%. The GDP in the second quarter grew by 11.5 % quarter on quarter.
First, agricultural production was sound and bumper harvest of summer grain was continued.
In the first half of 2020, the value added by agriculture (crop farming) grew by 3.8% year on year, 0.3 percentage points higher than that in the first quarter; specifically, the figure grew by 3.9% in the second quarter, 0.4 percentage points higher than the growth in the first quarter. The overall output of summer grain was 142.81 million tons, an increase of 1.21 million tons over that of the previous year, up 0.9%. The structure of crop farming was further optimized, as areas sown with cash crops such as rapeseed increased. In the first half, the output of milk grew by 7.9% year on year and that of eggs grew by 7.1%. The output of pork, beef, mutton and poultry fell by 10.8%, the decrease of which narrowed by 8.7 percentage points compared with that of the first quarter. Specifically, the output of poultry increased by 6.8%, up 5.7 percentage points; that of mutton, beef and pork dropped by 2.5%, 3.4% and 19.1% respectively, the decrease of which narrowed by 5.2 percentage points, 3 percentage points and 10 percentage points respectively. The production capacity of pigs continued to recover. By the end of the second quarter, 339.96 million pigs were registered in stock, an increase of 5.8% over the end of the first quarter, among which 36.29 million were breeding sows, up by 5.4% year on year, an increase of 7.3% over the end of the first quarter.
Second, industrial production recovered quickly and high-tech manufacturing and equipment manufacturing registered growth.
In the first half of the year, the total value added by industrial enterprises above designated size declined by 1.3% year on year, 7.1 percentage points slower than the decline of the first quarter; specifically, the figure grew by 4.4% in the second quarter and declined by 8.4% in the first quarter. In June, the total value added by industrial enterprises above designated size grew by 4.8% year on year, 0.4 percentage points faster than that of May, growing for the third month in a row, or up by 1.3% month on month. An analysis by types of ownership showed that the value added by state holding enterprises decreased by 1.5% year on year; that of share-holding enterprises decreased by 0.8%; enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan decreased by 3.4%; and private enterprises decreased by 0.1%. In terms of sectors, the value added from mining went down by 1.1%, from manufacturing down by 1.4%, and the production and supply of electricity, thermal power, gas and water declined by 0.9%, 0.6 percentage points, 8.8 percentage points and 4.3 percentage points slower than the decline of the first quarter respectively. The value added by high-tech manufacturing and equipment manufacturing grew by 4.5% and 0.4% respectively in the first half; specifically, the figures went up by 10% and 9.7% respectively in June. The output of some engineering machinery and new products witnessed fast growth. In the first half of the year, the production of excavators and shoveling machinery, integrated circuits, industrial robots and trucks grew by 16.7%, 16.4%, 10.3% and 8.4% year on year, respectively. In the first five months of 2020, the total profits from industrial enterprises above designated size totaled 1.84 trillion yuan, down by 19.3 percent year on year, the decline of which continued to narrow. Specifically, the figure went up by 6% year on year in May, while that in April decreased by 4.3%. The Manufacturing Purchasing Managers' Index stood at 50.9% in June, 0.3 percentage points higher than that of the previous month, staying above the threshold for the fourth consecutive month.
Third, the decline of service sector narrowed and modern service industries demonstrated favorable momentum.
In the first half of the year, the total value added by the tertiary industry dropped year on year, 3.6 percentage points less than the decline of the first quarter; specifically, the figure grew by 1.9% in the second quarter and dropped by 5.2% in the first quarter. By sectors, the value added by information transmission, software and information technology and that of financial services grew by 14.5% and 6.6% respectively; wholesale and retail trades, accommodation and catering declined by 8.1% and 26.8% respectively, 9.7 percentage points and 8.5 percentage points slower than the decline in the first quarter. In the first half of 2020, the Index of Services Production decreased by 6.1% year on year, 5.6 percentage points slower than the decline of the first quarter; specifically, the figure in June grew by 2.3%, 1.3 percentage points higher than that in May. In the first five months, business revenue of service enterprises above designated size dropped by 6.4%, the decline of which narrowed by 2.2 percentage points compared with that in the first four months; specifically, that of information transmission, software and information technology services grew by 8.4%. In June, the Business Activity Index for services was 53.4%, 1.1 percentage points higher than that in May. Specifically, the Business Activity Index for railway transportation, road transportation, air transportation, postal services, telecommunication, broadcasting, television satellite transmission services, internet, software and information services, monetary and financial services, capital market services and insurance stood at 55% and above. In terms of market expectation, the Business Activity Expectation Index for services was 59%.
Fourth, market sales gradually improved and online retail sales grew fast.
In the first half of 2020, the total retail sales of consumer goods reached 17.23 trillion yuan, down by 11.4% year on year, or 7.6 percentage points slower than the decline in the first quarter; specifically, the figure decreased by 3.9% in the second quarter, the decline of which narrowed by 15.1 percentage points compared with that in the first quarter. In June, the total retail sales of consumer goods reached 3.35 trillion yuan, a year-on-year decline of 1.8%, 1 percentage point slower than the decline in May, or a month-on-month growth of 1.34%. In the first half, analyzed by different areas, retail sales in urban areas reached 14.93 trillion yuan, down by 11.5%, and retail sales in rural areas stood at 2.29 trillion yuan, down by 10.9%. Grouped by consumption patterns, the income of catering was 1.46 trillion yuan, down by 32.8%; and the retail sales of goods were 15.76 trillion yuan, down by 8.7%. The retail sales of goods for basic living and medical supplies grew quickly. The sale of grain, oil and food, beverages and traditional Chinese and Western medicines by businesses above designated size grew by 12.9%, 10.5% and 5.8% respectively, 0.3 percentage points, 6.4 percentage points and 2.9 percentage points higher than the growth in the first quarter. Upgraded consumer goods grew fast. The retail sales of sports and recreational items and that of telecommunication equipment by businesses above designated size grew by 6.1% and 5.8% respectively, despite a decline of 5.1% and 3.6% in the first quarter. Online retail sales reached 5.15 trillion yuan, growing by 7.3% year on year, while that fell by 0.8% in the first quarter. Specifically, the online retail sales of physical goods was 4.35 trillion yuan, up by 14.3%, 8.4 percentage points higher than that in the first quarter, accounting for 25.2% of the total retail sales of consumer goods, or 1.6 percentage points higher than that in the first quarter.
Fifth, the decline of investment in fixed assets narrowed remarkably and the investment in high-tech industries and the social sector picked up.
In the first half of the year, the investment in fixed assets (excluding rural households) reached 28.16 trillion yuan, down by 3.1% year on year, the decline of which narrowed by 3.2 percentage points compared with that in the first five months, or 13 percentage points compared with that in the first quarter. Specifically, the investment in infrastructure was down by 2.7% and that in manufacturing down by 11.7%, the decline of which narrowed by 17 percentage points and 13.5 percentage points respectively compared with that in the first quarter; real estate development went up by 1.9% and down by 7.7% in the first quarter. The floor space of commercial buildings sold reached 694.04 million square meters, down by 8.4%, and the total sales of commercial buildings were 6.69 trillion yuan, down by 5.4%, 17.9 percentage points and 19.3 percentage points slower than the decline in the first quarter respectively. By industries, the investment in the primary industry grew by 3.8% despite a decline of 13.8% in the first quarter; that in the secondary industry went down by 8.3% and that in the tertiary industry down by 1%, 13.6 percentage points and 12.5 percentage points less than the decline in the first quarter respectively. Private investment reached 15.79 trillion yuan, down by 7.3%, 11.5 percentage points slower than the decline in the first quarter. The investment in high-tech industries went up by 6.3%, while that in the first quarter went down by 12.1%; specifically, the investment in high-tech manufacturing industries and high-tech services went up by 5.8% and 7.2% respectively. In terms of high-tech manufacturing, the investment in pharmaceutical manufacturing and the manufacturing of computers and office devices grew by 13.6% and 8.2% respectively. In terms of high-tech services, the investment in services for e-commerce services and commercialization of scientific and technological research findings grew by 32% and 21.8% respectively. Investment in the social sector increased by 5.3%, while declining by 8.8% in the first quarter. Specifically, investment in the health sector and education sector grew by 15.2% and 10.8% respectively, despite a decline of 0.9% and 4% in the first quarter. In June, the investment in fixed assets (excluding rural households) grew by 5.91% month on month.
Sixth, imports and exports exceeded expectation and the trade structure continued to be optimized.
In the first half of the year, the total value of imports and exports of goods was 14.24 trillion yuan, a year-on-year decline of 3.2%, 3.3 percentage points slower than the decline in the first quarter; specifically, that in the second quarter dropped by 0.2%, and that in the first quarter dropped by 6.5%. The total value of exports was 7.71 trillion yuan, down by 3%; the total value of imports was 6.52 trillion yuan, down by 3.3%. The trade balance was 1.19 trillion yuan in surplus. The trade structure continued to be optimized. In the first half, the import and export of general trade accounted for 60.1% of the total value of the imports and exports, an increase of 0.4 percentage points compared with that in the same period last year. The exports of mechanical and electronic products accounted for 58.6% of the total value of exports, an increase of 0.5 percentage points compared with the same period last year. In June, the total value of imports and exports was 2.70 trillion yuan, a year-on-year increase of 5.1%. The total value of exports was 1.51 trillion yuan, up by 4.3%, and the total value of imports was 1.18 trillion yuan, up by 6.2%. In the first half, the export delivery value of industrial enterprises above the designated size reached 5.43 trillion yuan, a year-on-year decline of 4.9%, 5.4 percentage points slower than the decline in the first quarter. In June, the export delivery value of industrial enterprises above the designated size shifted from a year-on-year decline of 1.4% in May to a growth of 2.6%.
Seventh, consumer prices rose slightly and producer prices for industrial products declined year on year.
In the first half of the year, the consumer price increased by 3.8% year on year, 1.1 percentage points lower than that in the first quarter. Specifically, the price went up by 3.6% in urban areas and up by 4.7% in rural areas. Grouped by commodity categories, prices for food, tobacco and alcohol went up by 12.2% year on year; clothing down by 0.1%; housing down by 0.1%; articles and services for daily use up by 0.1%; transportation and communication down by 3.2%; education, culture and recreation up by 2%; medical services and health care up by 2.1%; and other articles and services up by 5%. In terms of food, tobacco and alcohol prices, prices for grain increased by 1%, fresh vegetables up by 3.4%; and pork up by 104.3%, 18.2 percentage points lower than that in the first quarter. Core CPI excluding the price of food and energy went up by 1.2%. In June, the consumer price went up by 2.5% year on year, and down by 0.1% month on month.
In the first half of the year, the producer prices for industrial products decreased by 1.9% year on year. The figure in June dropped by 3% year on year, or up by 0.4% month on month. In the first half, the purchasing prices for industrial producers decreased by 2.6% year on year. The figure in June dropped by 4.4% year on year and up by 0.4% month on month.
Eighth, the urban surveyed unemployment rate declined slightly and employment was generally stable.
In the first half, the newly increased employed people in urban areas totaled 5.64 million, accounting for 62.7% of the whole-year target. In June, the surveyed unemployment rate in urban areas was 5.7%, 0.2 percentage points lower than that in May. Specifically, the surveyed unemployment rate of population aged 25-59 was 5.2%, 0.5 percentage points lower than that of the surveyed unemployment rate in urban areas, or 0.2 percentage points lower than that in May. The urban surveyed unemployment rate in 31 major cities was 5.8%, 0.1 percentage points lower than that in the previous month. The employees of enterprises worked an average of 46.8 hours per week. By the end of the second quarter, the number of rural migrant workers reached 177.52 million.
Ninth, the decline of residents' real income narrowed and urban-rural per capita disposable income ratio dropped.
In the first half of the year, the nationwide per capita disposable income of residents was 15,666 yuan, a nominal growth of 2.4% year on year, 1.6 percentage points faster than that in the first quarter, or a real decrease of 1.3% after deducting price factors, a decrease of which narrowed by 2.6 percentage points. In terms of permanent residence, the per capita disposable income of urban households was 21,655 yuan, a nominal growth of 1.5%, or a real decrease of 2%. The per capita disposable income of rural households was 8,069 yuan, a nominal growth of 3.7%, or a real decrease of 1%. By sources of income, the nationwide per capita wage income went up by 2.5% in nominal terms, net operating income down by 5.1%, net property income up by 4.2%, and net transfer income up by 8.2%. The per capita disposable income of urban households was 2.68 times that of the rural households, 0.06 less than that of the same period last year. The median of the nationwide per capita disposable income was 13,347 yuan, a nominal increase of 0.5% year on year.
Generally speaking, the national economy gradually overcame the adverse impact of the epidemic in the first half of the year and demonstrated a momentum of restorative growth and gradual recovery, further manifesting its development resilience and vitality. However, we should also be aware that some indicators are still in decline and the losses caused by the epidemic need to be recovered. Given the continuous spread of the pandemic globally, the evolving huge impact of the epidemic on the global economy and the noticeably mounting external risks and challenges, the national economic recovery is still under pressure. Next, we should take Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era as the guideline, coordinate efforts to advance routine epidemic prevention and control and economic and social development, stay goal-guided and problem-oriented, gather strength and strategize moves, recognize, seek and respond to changes, focus on key areas, address inadequacies and shore up weaknesses. We must make solid efforts to stabilize employment, finance, foreign trade, foreign investment, domestic investment, and market expectations, comprehensively implement the tasks to safeguard residential employment, people's livelihood, market entities, food and energy security, stability of industrial and supply chains and operations at grassroots levels, and ensure the implementation of decisions and arrangements so as to win the battle against poverty, achieve the goal of building a moderately prosperous society in all aspects and promote the long-term and stable growth of the economy.
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